Canada Adds 67,000 Jobs in October, Extending Modest Growth Into Second Month

A customer enters a restaurant with help wanted signs in Laval, Que., on Nov. 17, 2021. The Canadian Press/Ryan Remiorz

Canada’s labour market recorded an unanticipated increase in jobs in October, marking slight gains for the second month in a row, according to federal data.

The country’s economy saw an increase of 67,000 jobs in October, causing the unemployment rate to fall by two tenths of a percentage point to 6.9 percent, Statistics Canada said in a Nov. 7 report.

October’s employment numbers were primarily attributed to 85,000 new part-time positions, up 2.3 percent since September. Full-time employment decreased by 18,500 positions last month, following 0.6 percent growth in September, StatCan said.

Jobs in the private sector rose 0.5 percent during the same period to mark its first positive shift since June.

BMO chief economist Douglas Porter said the job growth in September and October served to fully reverse the “nasty two-month decline” seen in July and August.

He said while October employment stats are a “welcome result” it wasn’t all good news.

“On the more cautious side, all the net new jobs were part-time while full-time was weaker,” he said in a Nov. 7 client note. “The gains were also concentrated in a select few sectors… with 11 of 16 sectors reporting job losses.”

He credited a portion of the job increases to the Toronto Blue Jays’ pursuit of the World Series last month, adding that Ontario accounted for most of the job gains with 54,500 additions. He also noted that five other provinces reported job drops last month.

Scotiabank economist Derek Holt also warned against placing excessive signficance on the monthly job gain. The usual month-to-month fluctuations in the Labour Force Survey are typically around plus-or-minus 57,000 jobs, indicating that the October increase may still fall within the survey’s standard margin of error, he said in a Nov. 7 investor note

He noted that the jobs added were of “fairly low quality” with the majority of the growth originating from lower-paying sectors and part-time positions.

TD economist Leslie Preston echoed that message in her investor’s note, saying that while the StatCan report shows “some resilience” it also does not show any “strength,” saying that “overall job market conditions remain soft.”

Ontario’s growth was primarily driven by the information, culture, and recreation sectors, which accounted for 21,400 jobs, followed by accommodation and food services with 11,300 jobs, and retail and wholesale trade with 16,600 jobs.

The wholesale and retail trade sector experienced the highest growth, adding 41,000 positions in October, followed by transportation and warehousing, which saw an increase of 30,000 jobs, and the information, culture, and recreation sectors, which added 25,000 roles, StatCan said.

Manufacturing  recorded a rise of 8,700 jobs despite U.S. tariffs, while the construction industry faced a loss of 15,000 positions.

Goods-producing sectors have lost a net total of 54,000 jobs since January, a period marked by increasing uncertainty regarding U.S. tariffs and global trade, whereas the services sector has seen an addition of 142,000 jobs during the same timeframe, the report said.

Youth Jobs, Hourly Wage Up

The employment rate also improved in October for young workers after months of dismal figures. Youth aged 15 to 24 gained 21,000 jobs last month, marking the first increase since January.

This led to a decrease in the youth unemployment rate by 0.6 percentage points, bringing it down to 14.1 percent in October, after it had reached a 15-year peak in September, excluding the pandemic.

Average hourly wages have also risen, showing an annual increase of 3.5 percent in October to $37.06 an hour.

Holt said wages on a month-over-month annualized basis “super-accelerated” to 9.6 percent month-over-month, “the strongest gain since June 2022.” He warned that the combination of escalating salaries and deteriorating productivity could lead to a rise in inflation.

The Bank of Canada will closely analyze labour data as it gears up for its final interest rate decision of the year on Dec. 10. The central bank will also review the job figures for November prior to making that decision.

The benchmark interest rate set by the bank is currently at 2.25 percent after two successive reductions.

Governor Tiff Macklem suggested last month that the central bank may find the current benchmark interest rate acceptable unless future economic data varies from its forecasts.

The Canadian Press contributed to this report.